Social Security's 2027 COLA Forecast Dips to 3.5%-3.6%
New estimates from AARP and the Senior Citizens League trimmed their 2027 cost-of-living forecasts after July inflation cooled to 3.4%.
Older Americans and other Social Security recipients may see a smaller cost-of-living adjustment in 2027 than earlier projections suggested, according to two new estimates published Wednesday.
The Senior Citizens League, an advocacy group for older Americans, now projects a 2027 COLA of 3.6%, based on the July Consumer Price Index report released Wednesday. That is down from the group's forecast of 3.8% a month ago.
Separately, AARP said Wednesday it now projects a 3.5% COLA for 2027, down slightly from its earlier estimate of 3.6%.
Despite the lower forecasts, a benefit increase in that range would still mark the largest annual adjustment to Social Security payments since 2023.
Both groups lowered their projections after Wednesday's CPI report showed inflation cooled to an annualized 3.4% in July, down from 3.5% in June.
The average retired worker received $2,071 a month in Social Security benefits as of January, according to the Social Security Administration. A 3.6% COLA would raise the average monthly benefit by about $75, to roughly $2,146 a month starting in 2027.
The forecast is not final. The Social Security Administration will announce the official 2027 adjustment on October 14, after the release of the September CPI report. The official COLA will be based on July inflation data along with figures for August and September.
The COLA is intended to keep Social Security benefits ahead of inflation, but because it is calculated from past price increases, seniors often feel they are losing ground financially. The 2026 COLA, which took effect in January, was set at 2.8%, even though inflation has run higher than that since March.
"Seniors don't experience inflation as a percentage on a chart," Senior Citizens League Executive Director Shannon Benton said in a statement. "Frankly, it's infuriating that seniors must wait for a COLA to catch up with prices that have already driven up their grocery bills, housing costs, healthcare expenses and insurance premiums."
A June survey by the Senior Citizens League found that 89% of seniors said the 2.8% increase left their benefits short of covering inflation.
This article was produced with the assistance of artificial intelligence (AI), in accordance with our editorial policy.
